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Our economy, battling sanctions and Covid-19, got the shot it needed on Tuesday after receiving US$961 million, its share of special drawing rights (SDR) from the International Monetary Fund (IMF).

Since the money is not debt, but a pure injection into the economy, we foresee it assisting greatly in the Government’s spirited efforts to revive the economy.

Sanctions have been with us for two decades.  They have had an obvious adverse impact on the economy. However, since the Second Republic came into office in November 2017, it has come up with measures to overcome the embargo.  It is executing the engagement and re-engagement policy, pushing for better relations with those who have imposed sanctions on the country while strengthening ties with longstanding allies in Asia, Africa and elsewhere.

Also, the Government is improving the legislative framework to drive up investment.

Last year, in yet another big measure to stabilise the economy, the Government introduced the foreign currency auction system, a transparent platform where foreign currency is bought and sold. With foreign currency now easily and openly available, companies have been able to keep their prices stable. Inflation is declining as a result. The masses are now better able to plan and execute their budgets.

As a result, industrial capacity utilisation is increasing, and locally manufactured goods are dominating the market.

Covid-19 which broke out last year has frustrated progress but the Government and the IMF have forecast a 2021 economic growth rate of 7,4 percent and six percent respectively.

On another note, the Government has been prudent in its spending, running budget surpluses. This has enabled authorities to boost spending on infrastructure — building roads, dams, irrigation schemes, airports and so on.

Indeed, the economy has been on a positive trajectory, a positive which would be further boosted by the IMF injection.

We are delighted at the shot in the arm from the Bretton Woods institution. US$961 million is no small sum of money for our economy, especially since it comes at zero cost.

Therefore, we look forward to the money assisting in enhancing the stability of the local currency, in revitalising productive sectors of the economy, in expediting high-impact infrastructural projects that are underway, in strengthening the national response to Covid-19 and in delivering more social services to the vulnerable among us.

“The fresh funding would, thus, go a long way in boosting the overall economic operations,” said Finance and Economic Development Minister, Professor Mthuli Ncube, and RBZ Governor, Dr John Mangudya, in a joint statement on Tuesday.

“The immediate impact of this support from the IMF is to increase the foreign exchange reserves position of the country by US$961 million. This will go a long way in buttressing the stability of our domestic currency. The funds will be used prudently, with utmost accountability, to support the social sectors namely health, education, and the vulnerable groups; productive sectors that include industry, agriculture and mining, infrastructure investment covering roads and housing; and foreign currency reserves and contingency fund, to support our domestic currency and macro-economic stability.”

As indicated, the Second Republic has demonstrated its capacity in respect to judicious management of the national purse. Prof Ncube and Dr Mangudya made that clear in their joint statement. We, thus have no doubt that this very important and substantial disbursement from the IMF would be well spent with the national economy and its people benefiting.

Prof Ncube told the media yesterday that about US$500 million of the SDR allocation would be used to shore up the national currency.  This would be a masterstroke from the Government since a stable currency is, in large measure, the basis of a stable economy. The experience of the past 12 months of the auction system asserts that position.

The IMF injection would be helpful too in freeing up resources that the Government already had before Tuesday for spending in alternative areas of the economy. Whatever money the Government had planned to use in procuring Covid-19 vaccines or to back the national currency can now, for example, be spent on increasing social grants to the vulnerable or to speed up the rehabilitation of the Beitbridge-Masvingo-Harare-Chirundu highway.

We, indeed, are headed for exciting times economically.